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Opportunities Between Supply & Demand

 

 

 

 

Sometimes your goal is not to start a complicated entrepreneurial venture with multiple strategies for different parts of your business. Sometimes you are just looking to create a simple business to generate a consistent income source. Sometimes you don’t want to think about advanced business processes and systems of bringing about efficiency and agility. Sometimes you just want something that is simple, something that works, something that is easier to run with very few moving parts. We understand and appreciate this desire and would like to suggest some pointers in areas where you should look.

 

You need to be simple & clear in your thinking.

The most effective businesses are those that are built on very clear, already established growing demand and the services/products for which are in short supply. Let's say for example, you have noticed that in your area, during lunch time, many people come out looking for fast food, and they have to travel a long distance to get to it. When they arrive they have to wait long queues and sometimes certain foods even run out while they are standing in line. How do you see the business opportunity that lies in this situation? For the rest of this article we are going to use this example.

 

Start with the demand

While it may seem obvious to you how exactly how to resolve this situation, we encourage you not to make assumptions about where the business opportunity lies in this situation. You may think that it's obvious they need a restaurant that sells them fast food closer to their workplaces, or that you can create a business service around delivering their food to their workplace. Each of which are reasonable assumptions but they need to be verified by data first. Sometimes it may be because the restaurant they go to is exclusive and they value exclusivity more than availability. Sometimes they may love how the food is prepared there, or the distance away from the stressful workplaces. It could even be a place where they go to impress clients or bond etc. Sometimes that place could be a place where the higher execs eat away from the rest of the managers and line workers. What seems like a business problem related to food scarcity may have little relation with food whatsoever when it comes to the reason why people go and shop there. The truth is you never quite know until you ask them and verify why they shop there. Ask yourself if they are buying food because they are only considering their survival needs eg, the need to eat or is it because of safety needs because the food is well prepared in a neat and trustworthy way? Is it because of status exclusivity or power reputation inspired by the place? Is it because of the fact that they are looking for companionship, because the rest of their colleagues' shop there? Consult the Maslow's Hierachy of Needs. Figure out how to meet the demands they have and ask if they would actually buy from you if you created it. Think of KFC, it doesn’t just sell chicken, it sells an experience which is "finger lickin good". Think of Coca~cola and how it does not just sell drinks, it sells happiness, love and companionship. Be creative in how you define your total product.

Go to Supply side and Identify the Suppliers

After you have pinned down what exactly is being demanded, and having had devised a way through which you can help them satisfy it. Identify and map the Suppliers of the raw materials you will need to be able to add value that is needed. If for example, the need they need met is survival (meaning they just want food). You could create a business around either building a restaurant yourself or a transporting service to get the food to them. In which case your suppliers will be vehicle suppliers, petrol and diesel suppliers, packaging, restaurants making the food etc. Suppliers differ depending on the need being met and the value being created.

Clarifying the Business Opportunity

Clearly determine the value add that your business is going to create. (product/service that meets the demand) and begin marketing it.

So by now, you have an established demand that you understand. You also have confirmed responses of people that said they would buy from you should you help them meet their need(s). You have identified at least 3 suppliers of the raw materials you need. It's time to combine them all and create magic – make your first sale. You also need to begin communicating that you are in the business of meeting their pain-point needs and you are going to meet it how they want it met. Build and maintain communication networks to always be in the know if the needs your customers change. After just these 3 simple steps you have a business that is based on the 3 most important pillars of commerce, Customers Demanding to have a need met, Suppliers to assist with Raw materials and your activities that give value to meet the needs of the customers. Congratulations!

While you are able to build a relatively simple and profitable business with these insights, it is important to note however, that sometimes depending on the needs you are meeting, the type of customer you are selling to, the business environment etc, you may need varying degrees of additional elements to strengthen the value proposition of your business. Areas like how to access financing should you need it, creating partnerships to access new demographic segments as well as developing a good communication strategy to keep your stakeholders informed about your business activities etc. If you are not sure what the possible additional need of your business to run well are, please send an email at consult@thoughtmasters.co.za and we will help you perform an assessment of your business needs.